Alphabet Seeks Outside Investment for GFiber Internet Business
Alphabet, the parent company of Google, is planning to seek external investment for its GFiber business, which sells Wi-Fi and internet connectivity in parts of the United States. The company aims to expand its services to more cities and compete with larger internet service providers.
GFiber Expansion and Competition
GFiber, owned by Alphabet, has expanded to 15 states since its launch in 2012. In the past six years, it has tripled its customer base. The company has signed deals in 2023 to bring its services to over 25 additional cities.
However, GFiber still faces competition from larger internet service providers like Comcast, Verizon Communications, and AT&T. It has yet to provide internet in many areas, including several of the most populous cities.
Ruth Porat, Alphabet's president and chief investment officer, stated that raising external capital will help GFiber scale its technical leadership, expand its reach, and provide better internet access to more communities.
GFiber's Funding and Future Plans
Alphabet has hired an investment bank to initiate the process of selling equity in GFiber. The goal is for GFiber to become independent from Alphabet, but the amount of funds to be raised and the valuation sought have not been disclosed.
Dinni Jain, GFiber's CEO, expressed the company's readiness to scale its operations much faster. GFiber is part of Alphabet's collection of businesses known as Other Bets, which also include Verily and Waymo.
In 2023, the Other Bets collectively lost $4.1 billion on revenue of $1.5 billion. Alphabet aims to sharpen its investment focus and capture the upside of technology breakthroughs across its portfolio of Other Bets.
Alphabet's Cost Efficiency and Job Cuts
Alphabet, like other technology companies, is working to revamp its cost base. The company recently announced job cuts, but it's unclear whether GFiber's fundraising effort is directly related to Alphabet's cost-efficiency program.
Alphabet's moonshot division, X, is also seeking external capital to spin out more projects. Ruth Porat, Alphabet's president and chief financial officer, emphasized the need to capture the potential of compelling technology breakthroughs in the company's Other Bets.
Jeffrey Dastin, a correspondent for Reuters, reported on Alphabet's plans for GFiber. Dastin covers the technology industry and artificial intelligence based in San Francisco. He has been with Reuters since 2014.
